Transitioning to Circular Economy: How Do Business Models Evolve? Comparing Companies in the Food Industry

FAO has estimated that approximately one-third of global food production is wasted each year across the food supply chain, equivalent to approximately 1.3 billion tons of food, worth 1 trillion dollars. In addition to economic losses, food waste contributes to increasing global greenhouse gas emissions and unsustainable use of water, land, and energy. To respond to the societal need to reduce food waste along the supply chain, circular business models have emerged to replace the linear “take-make-dispose” models. As a result, many initiatives have been established to use resources and to prevent waste via optimizing residual streams. The case presents evidence from the food industry. This seems an ideal setting, given the great need to minimize food waste and loss both for societal and economic reasons. The megatrends impacting the food industry are described, along with a presentation of the characteristics of the food supply chain and CE approaches in agri-food. This will serve as a basis to better understanding challenges and opportunities provided by the external environment leading to potential strategic decisions faced by industry managers. Then, six short cases with stories of companies in the food industry that have implemented Circular Business Models are presented. The short cases serve as a basis for reflecting on the main problem faced by managers willing to move towards such models: How can one plan for the best transition to the Circular Economy and, given the importance of working together, how can one set up a successful collaboration?